So you want to be a COO

By: Cori Land
Source:https://medium.com/@cori.land/so-you-want-to-be-a-coo-804d730ab570)

A fun aspect of business school is exploring what you want to become. My dad, a successful small business owner, always encourages me to “think big.” It’s a broad statement but it has been a mantra for me in my exploration. Many business students feel prepared to become a manager–Product Manager, Operations Manager, Marketing Manager, etc. Is this “big” enough? Are we preparing ourselves to become executives? This semester, I undertook an independent study to understand the role of the Chief Operating Officer. I wanted to understand how COOs charted their careers, what their responsibilities include, how they interact with the rest of the C-Suite, and what mental models they use to be successful. I conducted research by interviewing COOs and by reading books and articles.

Why COO?

Ever since I discovered a natural talent for SET as a five-year-old, I’ve identified as excellent at pattern recognition. I love to scan broadly, diagnose what’s going on, design ways forward, and execute. As a programmer at the Federal Reserve Board, I managed hundreds of computer programs, some originally written in 1987. Optimizing that bird’s nest was fun–I had to have a broad picture of how and why all the programs fit together as well as the ability to drill down into any single line of code to fix it. At the time, it was the perfect mix of systems thinking and detail-oriented execution.

As I grew professionally, I wanted to take on bigger, more complex problems than programming presented. I joined the Business Operations team at Opower, a SaaS company helping 50+ million homes and businesses save energy. I served the Product, Engineering, and Client Success divisions. I analyzed operational data, listened to staff, observed teams, and partnered with senior directors to improve efficiency, quality, margins, and the employee experience. This career evolution involved working deeply with people. I loved it.

Interning at IDEO, I learned how to apply Design Thinking to drive internal transformations. I loved that work more than anything I’d done before. It was creative, collaborative, and deeply effective.

So, what executive oversees internal operations, coaches people to do their best work, drives innovation, all while supporting the company’s forward-looking strategy? The COO.

I interviewed six COOs. Four work at startups with 40 or fewer employees; one works at a company with 200 people; and one works at a 500-person company. All were within technology companies, spanning the e-commerce, financial services, gaming, and healthcare industries. Unsurprisingly, the COOs working at startups are younger than those serving in larger companies.

The Scope of the COO Role

The COO makes their organization work better. Most typically, the COO is the “heads down” counterpart to the “heads up” CEO. While the CEO leads external affairs and drives the vision, the COO makes the vision a reality. According to How to be a Chief Operating Officer by Jennifer Geary, the COO role rests on three fundamental pillars and oversees some or all of 13 technical areas. The pillars should apply to every COO whereas the technical areas a COO leads depends on company and C-Suite context.

Pillars

  1. Culture. Culture impacts every aspect of the company, so it is naturally within the COO’s purview to optimize it. While this is easier said than done, it’s incumbent upon you to figure out how to do it: learn from experts (like MIT Sloan Professor Emeritus Edgar Schein), seek help from culture consultants, read books about it. Just get to work: you can and will affect culture, whether you know it or not. Your words and actions will be seen and internalized. As Geary says, “culture change always starts today.”
  2. Strategy. Geary suggests, “if the organization you joined already has a strong strategy, you can get straight to execution. If the strategy is weak, your priority is to re-define it.” You’ll need to understand your company’s purpose, its changing environment, and how to proactively or reactively lead the company through obstacles to achieve its purpose.
  3. Change. If you want to adjust the culture or strategy in any way, you need to know how to lead change. Geary goes so far to say that “your role as COO is overseeing change.” As an Organizational Designer at IDEO, I learned to use the atomic elements of organizations as the levers you can adjust to drive change. Two popular organizational frameworks are the McKinsey 7S Operating Model and John Galbraith’s Star Model. Two popular frameworks for leading change are Lean Six Sigma and John Kotter’s 8-step process.

13 Technical Areas

  1. IT
  2. Finance
  3. HR
  4. Operations
  5. Risk
  6. Governance
  7. Legal
  8. Compliance
  9. Supply Chain
  10. Facilities
  11. Internal Communications & Public Relations
  12. Sustainability
  13. Safeguarding of Vulnerable People

EY synthesized the COO role nicely in their report, Aiming for the top: a guide for aspiring COOs and their organizations (2013). The graphic below summarizes the scope of the COO role.

Guide for aspiring COOs

No two COO positions are the same

As one COO I interviewed put it, “the COO is whatever the CEO doesn’t want to be or do.” Typically, CEOs are external facing. They lead the vision, serve as chairperson of the Board, serve as the face of the company for media reports and marketing campaigns, manage investor relationships, etc. In this typical case, almost all internal operations are left to the COO. However, what the CEO actually takes on depends on the stage of the company, what they are good at, and what they enjoy working on. Since this is based on the CEO’s personality and experience, what’s left for the COO will rarely be the same at any two companies.

This has a critical implication: when contemplating a COO role, you must understand the CEO’s role, responsibilities, preferences, style, and personality_._ Once you have a sense of the CEO, you’ll have a much better sense of what activities you’ll lead as their foil.

The seven COO archetypes

Despite the fact that the COO role is far from consistent across companies, Nathan Bennet and Stephen A. Miles found some themes as they explored the COO role in Second in Command: The Misunderstood Role of the Chief Operating Officer (HBR 2006).

They identified seven COO archetypes:

  1. The executor. They turn ideas and strategies into business realities.
  2. The change agent. They are brought on to lead a specific change initiative, such as a turnaround or a planned expansion.
  3. The mentor. They typically coach a young, founder CEO. They have deeper industry experience and apply that to co-lead with the CEO.
  4. The other half. They are the ideal foil for the CEO–they’re great where the CEO is not as developed or interested.
  5. The partner. They co-lead the company alongside the CEO.
  6. The heir apparent. They are groomed to take over the top post in a succession plan.
  7. The MVP. They are promoted from within in order to keep this valuable leader at the company.

The COOs I interviewed all defined their role as something very similar to “I make things happen.” Some also described themselves as a “utility person”, “the person that turns the idea into a business”, or “the person who keeps the trains running.” These self-descriptions are consistent with “the executor” COO archetype. Because I only interviewed six COOs, I’m can’t claim that all COOs are executors. However, it does seem that most COOs are probably executors at a minimum, filling out into one of the other six archetypes depending on their company and CEO context. Indeed, EY describes the COO as “the organization’s go-to ‘fix-it’ person.”

Making sense of the startup COO

In early stage companies, the CEO is very involved in all aspects of the business. Because of this, it may not make sense to have a COO until a certain level of scale is reached. I suspect it is after the company has developed a repeatable sales process upon which they can start to build repeatable internal processes. Once you reasonably expect to bring in a minimum amount of revenue, you start to understand how much product to build, how much marketing it will take to grow a healthy pipeline, and how much hiring you’ll need to do keep it all running. Before (reasonable) predictability is in place, it may not make sense to bring in another executive. More executives mean more salary paid out, more equity doled out, and slower decision-making due to more voices in the C-Suite. However, there are reasons to bring on a COO earlier than sales predictability is reached:

  1. The COO can help you reach product-market fit faster because of industry or product development expertise
  2. The COO has more experience building businesses and will serve as the “mentor” to the less experienced CEO
  3. If you started your business with them from the beginning (against the hacker, hustler, hipster advice). The COO title may help maintain a healthy co-founder relationship or convey clarity to outsiders
  4. If the CEO is so focused on fundraising that an internal-facing right-hand person is critical

These four reasons match up with what I heard from the startup COOs I interviewed. One COO co-founded his startup, telling me that he only has the COO title for clarity and credibility with external audiences. In reality, he manages business development, marketing, product, and operations: he is a “partner” and “executor” COO. Another startup COO shared, “I’m COO by title. I don’t really care what that means, I will be okay with a different title later. I’m a generalist doing whatever is necessary”–here’s another partner/executor startup COO. All four startup COOs I interviewed fell into this category. Generalizing from a tiny sample, it seems that startup COOs are co-founder generalists who partner with their CEO to turn the idea into a business.

Words to operate by

I asked the COOs if they have a mantra that they operate by. A somewhat out-there question, I wondered if they had a principle that they turn to in times of ambiguity. Here’s what the COOs shared:

“Make the decision and move on. There’s no time for a bunch of analysis, 80%, 60% is good enough. Very few decisions are company killing.” – startup COO, e-commerce

“Enjoy this. I don’t want to feel depleted on a regular basis. We had a really rough few weeks where we thought we wouldn’t make it. So I decided that I need to enjoy this regardless, to change my mindset.” – startup COO, financial services

“We build ugly shit that is functional. This happens in design, product development. We could make it 30% more pretty, but let’s get it out there. See what customers think.” –startup COO with product expertise, gaming

“Enable the business–every single function I oversee is here to support the business.” –mid-size COO (150–200 employees), financial services

“Assume the best. If you’re frustrated, stay calm and assume the best. We’re all in this together, trying to be our best selves. Eventually, you can figure anything out.” –mid-size COO (500+ employees), healthcare

“Do good, don’t worry about leaving pennies on the table–worry about the next interaction with the entity.” –startup COO, e-commerce/gaming

How to become a COO

The diversity of the COO role means there are many routes to the position. It is still useful to see how others got there.

Previous role could be… many things. Of the six COOs I interviewed, only one had served as COO previously. One had served as a CFO at several companies before becoming the CFO/COO in her current position, albeit in very different industries. Two had risen through product groups at technology companies. The two working in financial services had worked in finance, sales, marketing, and account management at banks or other financial companies.

Generalist vs. Specialist. You can go either route. As one COO I interviewed put it,

“Do what you like. Some people are super passionate about one thing: media, software, fashion, healthcare. That’s just not who I am, I’m more interested in the organization and the problem. And that is agnostic. You get a diversity of points of view, start to see patterns, compare and contrast, leverage different business models.”

Master’s degrees. Of the six COOs I interviewed, two have MBAs and three have Master’s degrees in either accounting, economics, or international affairs. According to the EY report DNA of a COO (2012), 54% of COOs have a Master’s degree or higher.

A diverse set of skills. According to the EY report, there are many skills that successful COOs exhibit. Here’s one look at what’s needed.

Skills needed to succeed as a COO

Note: percentage of respondents who have chosen 9 or 10 on a scale from 1= not needed at all to 10 = absolutely needed.

What COOs read

33% of COOs think their job has become more complex in recent years (EY, 2012). Continuing to learn is very important to staying successful.

I asked each COO what books or podcasts have influenced their thinking. Here’s a compiled list:

Books

Podcasts

After speaking to COOs and reading about the role in publications, I feel confident that I can become a COO. If I wanted to become one soon, I would go the startup route. It comes down to learning by serving in the role earlier or learning best practices in bigger, more established companies. Given that I’m 18 years younger than the average COO (48), I’m tempted to go the big company route–either by continuing in consulting with IDEO or going back into the technology sector in a strategy and operations role.

Either way, I’m excited about what comes next. Whatever step I take is in the right direction.